WESTERN STATES TRADING CO LTD. vs COMMISSIONER OF INCOME TAX, CENTRAL CALCUTTA

The Supreme Court held that under Section 10(2)(vii) of the Income Tax Act, 1922, the appellant was entitled to write off the loss incurred from the sale of the colliery as it was carried on during part of the accounting year. The Court clarified that since the colliery business was operational until November 29, 1954, the conditions for allowance were satisfied. Additionally, the Court ruled that the appellant could set off the profits from shares against the business loss under Section 24(2) as the shares were part of the trading assets, thus overturning the High Court's decision.